Morning Bell: The Road to Single Payer

Conn Carroll /
August 20, 2008

Yesterday in Albuquerque, N.M., Barack Obama told 1,800 adoring fans that, “If I were designing a system from scratch, I would probably go ahead with a single-payer system.” Obama was responding to a a voter who asked why he did not currently support single-payer health care. Obama explained: “Given that a lot of people work for insurance companies, a lot of people work for HMOs. You’ve got a whole system of institutions that have been set up. … So my attitude is let’s build up the system we got … may be over time … decide that there are other ways for us to provide care more effectively.”

The fact that Obama is ready to admit his plan is intended to be just a first step toward single-payer health care is news. However, for experts who have studied his plan closely, it is not. As Heritage’s Center for Health Policy Studies Director Robert Moffit details, by setting up government to be both the umpire and participant in the health care sector, Obama’s plan guarantees health care will eventually become a government-run industry.

Obama likes to sell his plan as “similar to that offered through Federal Employees Health Benefits Program (FEHBP).” Indeed, Heritage has long been a supporter of a national health care system modeled after the FEHBP. The FEHBP is a unique consumer-driven health program that covers federal workers and retirees and is run by the U.S. Office of Personnel Management (OPM). Under the FEHBP, competing health plans offer a variety of different benefit packages, from managed care offerings to health savings accounts plans. However, there is one huge difference between the FEHBP and Obama’s plan: under the FEHBP, the federal government does not offer an “OPM Health Plan” that competes with the private plans. Obama’s plan does create a government-run plan intended to “compete” with private plans. Therefore, the government would not only set the rules for competition, but it would also enter into the competition as a player.

Do you trust Congress to compete fairly? If the new government plan is anything like Medicare, Congress would determine the plan’s benefit offerings with a high degree of specificity and would also set the premiums, co-payments and deductibles that enrollees would pay. In the interest of “fairness,” Congress would then have to regulate the private plans so their payment schedules were comparable, thus creating a centralized federal standardization of health benefit offerings.

The U.S. health care industry currently leads the world in innovation and new medical treatments. But new treatments are always costly, and if the new government plan wants to remain competitive, then it must either offer these expensive treatments or limit their adoption in the private sector. Moffit concludes:

It is easy to imagine, then, Congress imposing health care price controls on the private sector as well as the public sector. This would import the annual congressional warfare over Medicare payment for doctors and other medical professionals into what is now left of the private sector. With government controlling the benefits as well as the price of the benefits, whether or not the payer is singular or plural, the result would be a government-run system.

The fact that Obama is now admitting his health care plan is just a first step to the nationalization of an entire sector of our economy comes as no surprise to any true conservative. As Friedrich Hayek wrote in “The Road to Serfdom“: “The more the state ‘plans’ the more difficult planning becomes for the individual.”

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